A Referral Program with a New Twist

By Casey Conrad

Ask any salesperson, “What’s the best source of leads available?” They won’t hesitate to say, “Referrals.” Of course, that shouldn’t come as a surprise to anyone in our industry. The idea of generating referrals isn’t anything new. In fact, statistics show that a majority of most clubs’ business comes form referrals.

What may surprise some people, though, is that most referral sales happen because the referral walks through the club door on their own accord – not because of an initial contact by a club salesperson.

This is not to say that the club salespeople don’t try to get referrals from members. They do. But the reality of the situation is that most salespeople are not getting the number of referrals they could and should get. Fear of rejection, fear of disturbing the sale, and just generally getting frustrated with “No, I can’t think of anybody right now” has salespeople gun-shy about asking a member for a referral even once – never mind multiple tries.

The best way to find out exactly how your salespeople are doing with self-generated referrals is simply by asking them: “Please show me the names and contact numbers or addresses of all the referral leads you are currently working with.” Although there are always exceptions, the result is usually the same – few or no names.

But rather than focusing on what isn’t being done, let’s talk about how you can set up a program that allows your salespeople to self-generate more referrals.

The Elements of Success

In order for a referral program to be successful, it must have certain elements. First, it has to be easy for the staff to implement. Second, it must be easy for members to understand. The key here is easy for everyone. If it is too complicated, staff won’t take the time to explain it, and members won’t take the time to figure it out and participate. Third, there needs to be an incentive for the members to participate.

Finally, and perhaps most importantly, the program must give the club the ability to directly contact the referrals. Unfortunately, this is usually the most overlooked element, and its absence definitely hinders a program’s success. Here’s why.

When salespeople approach members about a referral program, aside from “I can’t think of anyone right now,” the most common response they hear is “Sure. Give me the pass, and I’ll get it to my friend.” The problem with this scenario is two-fold. First, the salesperson has no way of ensuring that the pass will make it to the friend. Second, the salesperson has no input as to what the member is telling the friend. For instance, the member might say, “Gee, I don’t know if you’d even want to use it or not, but I have this pass to the club.” Now there’s a compelling presentation if I’ve ever heard one!

How the Program Works

Here is what you need to run the program:

A form letter reproduced on club stationery
Stamped Envelopes
Gift certificates or guest passes
Prizes
A raffle box
A motivated sales team

The referral promotion revolves around a raffle, and members qualify for various prices depending on their level of involvement. Salespeople approach new and existing members and let them know that the club is offering its members the ability to give gift certificates for use of the club to a select number of their friends. The club sets the period of time. Giving the gift certificates is made easy by having the member fill out and sign a form letter and address an envelope to their friend. The salesperson will validate a gift certificate, put an expiration date on it, enclose it in the envelope, place a stamp on it, and drop it in the mailbox.

Having the program set up this way ensures that the friend will receive the gift certificate but is non-threatening to the member because the salesperson is not asking for a phone number.

The Incentive

The incentive part of the program revolves around a raffle. For every gift certificate a member sends out, they ear one entry into the raffle. If their friend comes in, they receive and additional two entries. Finally, if their friend becomes a member, they will receive an additional five entries. Therefore, the more qualified the referral, the more chances the member has of winning. More importantly, though, this type of program encourages everyone to participate because even the member who sends out only one gift certificate has a chance of winning.

Now, what should be used in the raffle? The most important thing here is that the grand prize be something nice. A mountain bike, a weekend getaway for two, or cash have all worked out well, but every club is different. Just make sure that the prize appeals to a majority of the members at your club. In addition to a grand prize, one way to keep interest in the program high is by having a series of smaller raffles throughout the promotion. For instance, if you plan on running the promotion for two months, have three smaller raffles every two weeks. For these prizes you can raffle off club stuff or you can even go outside and get things donated by local businesses, giving them some free exposure throughout the promotion.

Of course, as is the case with any in-club promotions, the staff will make or break its success. Every staff member who is going to be involved in the program must be trained in how to approach new and existing members and be proficient in dealing with objections. When trained and coached correctly, the program can be implemented by everyone from sales to front desk staff.

Depending on your club’s budget and your past success with raffles, you can also incorporate another incentive to this program. In addition to the raffle chances, for example, every member whose friend enrolls could automatically get a gift, such as a t-shirt, sweat shirt, or gym bag. Guaranteeing some type of gift can motivate members who are not happy just with being eligible for raffle prizes.

Finally, keep in mind that the concept for this promotion can be altered to fit your club and its particular environment. The key is using the letter and gift certificate to ensure that the friend receives a nice, professional invitation to try out your club.

Remember, increasing traffic is key to selling more memberships. Be creative, be fun, and use this new twist on a referral program to get more guests walking through your club doors.